CVS, Rite Aid stop accepting Apple Pay

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Apple Pay launched in the US last week, and its apparent success is already breeding contempt: With no public explanation, both CVS and Rite Aid — huge US drugstore/pharmacy chains — have stopped accepting Apple Pay. The same block is also reportedly in place at Walmart and other big retailers. Both CVS and Rite Aid accepted Apple Pay when it first launched on Monday last week, but have since disabled NFC-based contactless payments on their stores. A leaked memo from Rite Aid says a consortium of US retailers is working on a mobile wallet solution, and presumably Apple Pay was disabled so that their own solution — called CurrentC — will stand more of a chance when it’s launched in 2015. Sometimes it just plain sucks to be a consumer.

Apple Pay is a mobile wallet for the iPhone 6 and 6 Plus that, by putting your finger on the Touch ID sensor, lets you pay for stuff via NFC (i.e. swiping your phone somewhere near a compatible NFC-enabled point-of-sale device). Outside the US, most point-of-sale devices have been upgraded to support contactless payments over the last few years — and now, with a concerted effort from Apple, MasterCard, Visa, and Amex, it seems US retailers are finally taking the plunge as well. Apple Pay finally launched on Monday last week, and except for a few minor teething issues it sounds like everything is going well — that is, until CVS and Rite Aid disabled contactless payments nationwide. Other large retailers, such as Walmart, Best Buy, and Gap, have reportedly also blocked Apple Pay.

Rite Aid Apple Pay blocked

If you try to use Apple Pay at Rite Aid, you’ll probably see the following message: “At this time Apple Pay is not accepted. Please swipe a card or provide another form of payment.” In a leaked memo, obtained by Slashgear, Rite Aid tells its employees why Apple Pay has been disabled:

Please note that we do not accept Apple Pay at this time. However we are currently working with a group of large retailers to develop a mobile wallet that allows for mobile payments attached to credit cards and bank accounts directly from a smart phone. We expect to have this feature available in the first half of 2015.

The “mobile wallet” that Rite Aid refers to is CurrentC, a system being developed by Walmart, Best Buy, CVS, Rite Aid, and other massive US retailers that does much the same thing as Apple Pay. There is one big difference, though: While Apple Pay is backed by the usual credit card providers (Visa, MasterCard, Amex), CurrentC is a standalone system, completely avoiding the credit card providers — and thus evading the dreaded 2-3% card processing fee that merchants must pay for every transaction.

It’s not hard to see why CVS and Rite Aid have disabled Apple Pay: As far as the retailers are concerned, Apple Pay is in direct competition to CurrentC. If Apple Pay gains enough market and mind share over the next few months then CurrentC doesn’t stand a chance when it arrives in the first half of 2015. In the eyes of the retailers, Apple Pay (not unfairly) represents a significant loss of profit.

Ultimately, of course, it is the consumer who will suffer the brunt of this spat. You could possibly argue that CurrentC is better for consumers, because the savings could be passed along to consumers — but in reality, CurrentC will probably just be used to better track your buying habits, with the retailers gushering hearty guffaws all the way to the bank.

With the negative press that CVS and Rite Aid are getting over their abolition of Apple Pay, it’ll be interesting to see whether it gets reinstated or not. If the entire CurrentC consortium sticks to its guns and Apple Pay is outlawed at stores like Walmart, Best Buy, and CVS — some of the largest chains in the US — then Apple’s nascent mobile wallet may struggle to gain widespread adoption.

Tagged In

Seriously? This has more to do with these stores making it more inconvenient for their customers by taking away a form of payment than anything. As well as trying to save that 2-3% fees the credit card companies collects which in turn means a higher profit margin for the stores themselves.

CurrentC actually sounds like a sensible thing… It takes away some of the power of the credit card companies. The whole tracking business, well, one can argue it’s a good and a bad thing. If the retailers would find that more people buy fresh vegetables and locally sourced, organic meats then the retailers could provide that stuff at better prices… sorry I ventured into Dreamland there.

charlie november november

“CurrentC will probably just be used to better track your buying habits” — as opposed to Cupertino doing the tracking with ApplePay and doing their damnedest to drive you to iTunes and AppleStore?! Apple is just as guilty in trying to drive consumers to their sites and products as Amazon is with their phones and tablets! Why is Apple trying to keep track and control spending habits NOBLE and when others try to do so, EVIL?! What you often laud as “the Apple eco-system” is more like the Apple LOCK-IN system. FORCING their GARBAGE Safari browser and CRAP Apple Maps as the default, for example. You championed consumer CHOICE when Microsoft was forced to stop making Internet Explorer the (almost unchangeable) default in Windows. Yet, you GUSH over Apple making similar lock-ins (to the extent of not even allowing the user to have choice in their iPhone iOS UI except their ancient page after page of unalterable icons!) The Cupertino explanation (AKA EXCUSE) of having a “better, more consistent user experience” is the EXACT SAME as the one you DECRIED when Microsoft used it. Why isn’t what is good for the goose, good for the gander in your opinion?

Sure, let’s not discuss Apple’s dictatorial LOCK-in policies, and instead talk about cap LOCKS! Amazing that the company which was lauded for the 1984 commercial, supposedly promoting the concept of freedom for the customer, instead has done everything in their power over the years to limit any choice, both in hardware and software.

Zunalter

What is the point of getting all fired out about Apples bad policies? I personally have only ever owned a single Apple device, an iPhone 3GS back in the day. Since then, I have steered largely in the Android direction.

Point being, nobody is forcing you to own an Apple device. There aren’t roving bands of Apple employees chaining unsuspecting consumers with iDevices against their will. You are getting all pissed about how closed off their ecosystem is when you can quite easily walk into any mobile store and get something other than Apple, and thus be free from their onerous constraints.

If people feel the same way you do about the subject, they will get a phone from someone else, simple as that. Judging by sales of the iPhone, people are fine with the trade-off you seem so fired up about. Perhaps THAT ;) should be the object of your scorn.

Marco

EVERY company out there has a strategic information department, regardless of what they call it. They ALL want to track and/or influence your purchases. I’m not sure why one would trust Apple more or less to do this than retailers, Google, or anybody else. Are the retailers just supposed to say, “Aw, jees, Apple Pay just came along to compete with this product we’ve been working on for some time now, that we think will increase our bottom lines. Guess we’ll just close down that project and welcome Apple Pay with open arms. Here, have our money.” Of course not.

TD

“Ultimately, of course, it is the consumer who will suffer the brunt of this spat.”

Because clearly, ALL CONSUMERS Love, Honor and Obey ALL Apple Products and Services at ALL times and are ALWAYS Yearning for MORE APPLE!

Well, I more mean that it’s nice to have the CHOICE, rather than being forced to use one payment method over another. But I’m from Europe, where consumers actually have some rights/privileges — so maybe it’s wishful thinking that I hope US consumers can be afforded the same :)

golgo13

Its a damn shame that these guys are allowed to block the competition in order to promote their goods. Remember when Verizon blocked google wallet, in order to promote Isis? No one really uses either. They could’ve charged Google a very small percentage and moved on, that way everyone gets a piece.

Zunalter

Yea here in the US we think that companies should run themselves however they want and let the consumer decide with their dollars what practices are acceptable or not.

MadisonHJ

A nice piece of malware is while one swipes their iPhone with Apple Pay near the pay terminal, it swipes all their info off the phone or injects backdoor malware onto the iPhone. Ok, just kidding.

Decimal

Its running iOS, what more malware could it possible need?

porksickle

This title of article is factually incorrect. They did not disable solely apple pay. They disabled any NFC compatible transactions. This benefits no one, and shuts off all ability for anyone to use NFC based transactions of any type from these stores, from any device, including android phones, windows phones, whatever. But I suspect the author knew that, and was just trying to get clicks and comments. It appears he succeeded, and none of the commenters even noticed.

WatDah

Bingo. Shame that people’s hate for Apple is covering their eyes on what this is really about. Which is saving the fees these stores pays to credit card companies and in turn make more money for themselves.

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